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General Certificate of Education (International) Syllabus Advanced Level and Advanced Subsidiary Level ACCOUNTING 9706 For examination in June and November 2010 CIE provides syllabuses, past papers, examiner reports, mark schemes and more on the internet. We

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ACCOUNTING

GCE Advanced Subsidiary Level and GCE Advanced Level 9706

for examination in June and November 2010

CONTENTS

Page

INTRODUCTION 1

AIMS 1

ASSESSMENT OBJECTIVES 2

SCHEME OF ASSESSMENT 4

CURRICULUM CONTENT 6

RESOURCE LIST 23

INTERNATIONAL STANDARDS TERMINOLOGY 25

INTERNATIONAL ACCOUNTING STANDARDS 26

Exclusions

This syllabus must not be offered in the same session with any of the following syllabuses: 7110 Principles of Accounts 9372 Principles of Accounting (Singapore)

ACCOUNTING 9706 A LEVEL AND AS LEVEL 2010

1

1 INTRODUCTION 1.1 The aim of this syllabus is to enable Centres to develop Accounting courses that are

suitable for Advanced Level candidates and for those seeking a more limited study of the subject.

1.2 There are three pathways available to candidates (in all cases subject to the correct

examination entry being submitted):

(a) Those candidates who wish to take the whole of the Advanced Level qualification at the end of a course of study take all four papers together.

(b) Those candidates who aim only for an Advanced Subsidiary Level qualification take

only Papers 1 and 2. (c) Candidates who wish to follow a staged assessment route to the A Level

qualification take the Advanced Subsidiary Level first. Subject to satisfactory performance, they then need take only the two Supplement papers in order to complete the A Level.

1.3 No previous study of the subject is assumed by the syllabus. It is, however, desirable.

2 AIMS 2.1 The syllabus is intended to encourage courses that will enable students to:

(a) develop an ability to apply accounting concepts, principles and practices;

(b) understand the role of accounting as an information system for monitoring, problem-solving and decision making and the place of accounting in changing economic, social and technological environments;

(c) develop a critical and analytical approach to examining and evaluating accounting policies and practices;

(d) develop skills of communication, analysis, interpretation and presentation of both qualitative and quantitative accounting information.


2

3 ASSESSMENT OBJECTIVES 3.1 Candidates are expected to:

1 DEMONSTRATE KNOWLEDGE AND UNDERSTANDING of the accounting procedures and practices in the specified content and the principles on which these are based;

2 APPLY knowledge and understanding of accounting procedures, practices and principles to familiar and novel situations;

3 SELECT, ORDER, ANALYSE and PRESENT information in an appropriate accounting form;

4 PRESENT REASONED EXPLANATIONS, understand implications and communicate them in a clear and logical manner;

5 MAKE JUDGEMENTS, recommendations and decisions based on accounting information and principles.

3.2 The Multiple Choice components (Papers 1 and 3) will seek to test Assessment Objectives 1, 2 and 3.

The written papers (Papers 2 and 4) will also seek to test mainly Assessment Objectives 1, 2 and 3, but to a lesser extent will also test Assessment Objectives 4 and 5.

SYLLABUS OVERVIEW

Theme Topic AS Level Advanced Level

THE ACCOUNTING SYSTEM

A Recording Financial Information

B Accounting Principles

C Control Systems

Examined at AS

Examined at AS

Examined at AS

May be examined at A Level



FINANCIAL ACCOUNTING

D Preparation of Financial Statements

E Capital (Equity)

F Business Purchase

G Published Company Accounts

Examined at AS

Examined at AS

-

-

Includes additional content at A Level


Examined at A Level

Examined at A Level

FINANCIAL REPORTING AND

INTERPRETATION

H Interpretation and Analysis

I Company Financing

Examined at AS

-


Examined at A Level

ELEMENTS OF MANAGERIAL

ACCOUNTING

J Costing Principles and Systems

K Budgeting

L Standard Costing

M Investment Appraisal

Examined at AS

-

-

-

Includes additional content at AL

Examined at A Level

Examined at A Level

Examined at A Level

3


4

4 SCHEME OF ASSESSMENT

ADVANCED SUBSIDIARY LEVEL

Paper Type Duration Number of questions

Maximum mark on

paper

Approx. weight (% of total marks for syllabus)

1 Multiple Choice (AS Topics)

1 hour 30 30 30

2 Structured Questions (AS Topics)

1 hr 30 mins 3 90 70

The first question in Paper 2 will always be based on the final accounts of sole traders or partnerships.

ADVANCED LEVEL

Paper Type Duration Number of questions

Maximum mark on

paper

Approx weight (% of total marks for syllabus)

1 Multiple Choice (AS Topics)

1 hour 30 30 15

2 Structured Questions (AS Topics)

1 hr 30 mins 3 90 35

3 Multiple Choice (Supplement Topics)

1 hour 30 30 15

4 Problem Solving (Supplement Topics)

2 hours 3 120 35

Papers 1 and 2 for Advanced Level are the same as Papers 1 and 2 for Advanced Subsidiary Level.

Each item on Paper 3 will test a topic in the A Level Supplement part of the syllabus, but may also require a knowledge and understanding of the AS Level syllabus.

Each of the three questions in Paper 4 will test a topic or topics in the A Level Supplement part of the syllabus, but may also require a knowledge and understanding of the AS Level syllabus.


5

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6

5 CURRICULUM CONTENT

AS LEVEL

Content Notes of Amplification

THE ACCOUNTING SYSTEM

A. Recording Financial Information The recording and processing of accounting data based on the double-entry system of accounting.

Double entry bookkeeping, journal entries, accruals (other payables), prepayments (other receivables), bad debts and the provision for doubtful debts. The distinction between capital and revenue incomes and expenditures and the treatment of tangible fixed (non-current) assets including their depreciation, disposal and revaluation. The treatment of current assets, current liabilities, long-term (non-current) liabilities, capital (equity) and reserves.

B. Accounting Principles The recognition and application of accounting concepts.

The principles, concepts and conventions which underlie the accounting process including going concern, matching, accruals (other payables), prepayments (other receivables), consistency and materiality. The importance of a true and fair view, and of prudence and substance over form. The use of the business entity, historical cost and revaluation as features of the recording system.

C. Control Systems Principles of accounting control systems.

The Trial Balance, Bank Reconciliations, Suspense accounts, Control accounts and the Correction of Errors and consequent adjustments to the Profit and Loss Account (Income Statement) and Balance Sheet.


7

A LEVEL


THE ACCOUNTING SYSTEM Knowledge of all the material in the AS Level syllabus is assumed at A Level (but will not be tested in detail).


8

AS LEVEL


FINANCIAL ACCOUNTING

D. Preparation of Financial Statements

The periodic determination of profit (or earnings) and overall financial position based on historical cost data and generally accepted accounting principles and policies, conventions and practices which relate to:

This section covers the preparation of final accounts (financial statements), namely: Manufacturing, Trading, Departmental, Profit and Loss Accounts (Income Statements), Appropriation Accounts, and Balance Sheets, in good style and format.

(a) Sole Traders and Private Limited Companies

Manufacturing, Trading, Departmental, Profit and Loss Accounts (Income Statements) and Balance Sheets.

• The Published accounts of PLCs are not examined at AS level

(b) Partnerships Only the preparation of Partnership Appropriation accounts, Current accounts and Capital accounts will be tested at AS level.

For example, clubs and societies.

(c) non-profit making (not for profit) organisations

(d) accounts prepared from incomplete records or where financial records are deficient or erroneous

A general knowledge and understanding of the accepted principles and application of Stock Valuation (Inventory), Depreciation and Goodwill (Intangible Assets) as it applies to the above.

Stock valuation

The calculation of closing stock valuations (inventory) using the FIFO, LIFO and AVCO methods (perpetual and periodic).

The effect of different methods of stock valuation (inventory) on profit and the stock valuation in the Balance Sheet.

The different characteristics of, and the appropriateness of, using FIFO, LIFO and AVCO.

The principle of applying the lower of cost or net realisable value when valuing closing stock (inventory).

• Questions will not be set on long-term contracts.

Depreciation

The causes of depreciation: physical deterioration, economic factors, obsolescence, inadequacy and the passage of time.

The terminology used in accounting for depreciation: cost, useful asset life, residual (scrap) value.

The reasons for accounting for depreciation and the application of relevant accounting concepts.

Financial Accounting for AS Level is continued on page 10


9

A LEVEL


FINANCIAL ACCOUNTING D. Preparation of Financial Statements Knowledge of all the material in the AS Level syllabus opposite is assumed.

As for the AS Level syllabus opposite, plus:

Cash Flow Statements The preparation of cash flow statements in good style and format and in accordance with current accounting standards such as FRS1 and IAS7. The internal final accounts (financial statements) of Limited Companies.

Partnership Changes Changes in partnership – incoming and outgoing partners. Changes in profit sharing ratio. Dissolution of partnership. Effects of asset and liability revaluation. Goodwill (Intangible Assets) adjustments in partners’ capital accounts (i) with the introduction of a goodwill

(intangible assets) account in the firm’s books, and

(ii) when no goodwill (intangible assets)

account is to be introduced.


10

AS LEVEL


AS FINANCIAL ACCOUNTING (continued)

The calculation of depreciation: reducing balance, straight-line and revaluation methods.

The calculation of profit or loss on disposal of fixed (non-current) assets; ledger accounts and journal entries for fixed (non-current) assets, depreciation and disposal; the application of relevant accounting concepts.

Goodwill (Intangible Assets)

The concept and treatment of goodwill (intangible assets) as it applies to Sole Traders and Limited Companies. (Partnership treatment of goodwill (intangible assets) is in A Level only)

A knowledge of taxation is not required.

Questions will not be set on any aspects of:

• Brand names (may be referred to at A level)

• Container accounts

• Joint ventures

• Royalties

• Investment accounts involving the apportionment of income and capital

• Piecemeal dissolution of partnership, or the rule in Garner versus Murray

• Bills of exchange

• Group or Consolidated accounts

• Hire purchase accounts or branch and consignment accounts are also excluded.


11

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12

AS LEVEL


E. Capital

The raising of capital.

The main types of share capital: ordinary shares; preference shares (cumulative, non-cumulative, participating and redeemable). The principles of overdrafts; trade credit and factoring; loans and debentures. The effect on the Balance Sheet of the issue of shares. The effect on the Balance Sheet of bonus and rights issues.

• Questions will not be set on forfeiture of shares, redemption and purchase of own shares by a company, or on convertible loan stock.

• Questions will not be set involving the detailed procedure or book-keeping entries for share issues.

• Questions will not be set on the published accounts of Limited Companies.

F. Business Purchase G. Published Company Accounts

This topic is NOT in the AS Level syllabus. This topic is NOT in the AS Level syllabus.


13

A LEVEL


E. Capital (Equity)

The whole of the AS Level syllabus opposite, plus the following: (a) Premium on redemption of shares and the

Capital redemption reserve. (b) Repayment of share capital. (c) Redemption and purchase of own shares. (d) Repayment of debentures. (e) Convertible loan stock. (f) Distributable profits.

As for the AS Level syllabus opposite, plus the following: The effect on the Balance Sheet of the redemption of shares, capital reductions and reconstructions. Revenue and capital reserves.

• Questions will not be set on forfeiture of shares.

A knowledge of share issues, capital reductions and reconstructions.

• Questions will not be set involving the detailed procedure or book-keeping entries required in the Journal or in ledger accounts for share issues, capital reductions or reconstructions.

F. Business Purchase

The purchase of an unincorporated business by a limited company.

The purchase of assets, and the assumption of liabilities of one business by another, or by a new company which buys one or more existing businesses.

An appreciation of return on investment; calculation of goodwill (intangible assets) and negative goodwill (intangible assets); purchase of a business by issue of shares, debentures, and by cash.

Merger of unincorporated businesses to form a partnership.

Evaluating a business with a view to acquiring it.

Mergers by means of combining or purchasing assets and liabilities.

Valuation of a business by book value and net equity methods.

G. Published Company Accounts Principles governing the disclosure requirements of company annual reports covering:

(a) Report of the Directors;

(b) Income Statement (Profit and Loss Account);

(c) Balance Sheet;

(d) Cash Flow Statement.

(e) Statement of total recognised gains and losses.

The main disclosure requirements relating to published corporate reports.

Disclosure of accounting policies.

Familiarity with the requirements to disclose details concerning fixed assets, depreciation.

Treatment of intangible assets.

• Questions which rely wholly or mainly on the Companies Acts concerning the format of published accounts will not be set.

• Questions will not be set on corporate governance, reports of audit committees, remuneration committees, interim reports, segmental information and foreign exchange.


14

AS LEVEL


FINANCIAL REPORTING AND INTERPRETATION H. Interpretation and Analysis Users of financial statements. Calculation of ratios.

The differing requirements for information of user groups including management, shareholders, employees, potential investors, creditors/trade payables, government, public and environmental bodies. See ratios given on pages 20-22. Ratios to aid the appraisal of profitability, liquidity and efficiency. The calculation of the following specific ratios: Return on capital employed

Gross profit and net profit (profit (before tax) for the year) as a percentage of turnover

Sales (Revenue) to capital employed

Expense ratios

Sales (Revenue) to fixed assets

Current ratio

Liquid (acid test) ratio

Stock (Inventory) turnover (times and days)

Debtor (Trade Receivables) collection period (days)

Creditor (Trade Payables) payment period (days).

Analysis and interpretation of accounting information Limitations of accounting information I. Company Financing

The presentation, analysis and interpretation of accounting information as an aid to decision making by user groups; inter-firm comparisons and trend analyses. The limitations of accounting information. The difficulties of comparison presented by subjectivity, time lapse, monetary measurement and other external factors. This topic is NOT in the AS Level syllabus.


15

A LEVEL


FINANCIAL REPORTING AND INTERPRETATION H. Interpretation and Analysis Builds on the whole of the AS Level syllabus opposite; questions may be set on all ratios in the Syllabus (both AS and A Level). I. Company Financing The financing of companies including capital gearing, capital structures, and loan capital. The bases of modern financial reporting and its limitations.

See ratios given on pages 20-22. Ratios to aid the appraisal of financial structure; gearing and Stock Exchange ratios. Rights and bonus issues. An understanding of the disclosure standards adopted by quoted companies. A basic knowledge of the following standards and how these standards relate to topics in the syllabus.

IAS Topic FRS/

SSAP

IAS 1 Presentation of Financial Statements

FRS3

IAS 2 Inventories (stocks)

*(not long term contracts)

SSAP9*

IAS 7 Cash flow statements FRS1

IAS 8 Accounting Policies FRS18

IAS 10 Events after balance sheet date

SSAP17

IAS 16 Property, plant and equipment

FRS15

IAS 18 Revenue

IAS 23 Borrowing costs

IAS 32 Financial Instruments: presentation and disclosure

FRS4

IAS 33 Earnings per share FRS14

IAS 35 Discontinuing operations FRS3

IAS 36 Impairment of assets FRS11

IAS 37 Provisions, contingent liabilities and contingent assets

FRS12

IAS 38 Intangible assets FRS10

IAS 39 Financial Instruments: recognition and measurement

FRS13


16

AS LEVEL


ELEMENTS OF MANAGERIAL ACCOUNTING J. Costing Principles and Systems

Cost accounting for material, labour and overheads.

The elements of cost: cost classification and ascertainment of fixed, variable and semi-variable costs, stepped costs, total costs, unit costs and sunk costs.

Marginal (Variable) Costing

Making simple business decisions using marginal costing. The concept of contribution and its application to the calculation of sales (revenue), cost and profit data. The calculation of the break-even point, contribution to sales (revenue) ratio and margin of safety, the preparation and use of break-even graphs and contribution to sales (revenue) (profit/volume) graphs. The advantages and limitations of cost-volume-profit analysis. The evaluation and interpretation of cost-volume-profit data and its value as a support for management decision making.

Absorption (Total) Costing

Making simple business decisions using absorption costing. The classification of direct and indirect material and labour costs, other direct expenses and overhead expenditure. The allocation and apportionment of overhead expenditure between production and service departments and the calculation of overhead absorption rates; under absorption and over absorption of overheads. The uses and limitations of marginal costing and absorption costing. Stock (inventory) valuation using absorption and marginal cost principles.

Costing systems

Costing systems as used for job, unit, and batch costing, including the calculation of stock (inventory) values.

• Questions will not be set on process costing.

K. Budgets

L. Standard Costing

This topic is NOT in the AS Level syllabus.

This topic is NOT in the AS Level syllabus.


17

A LEVEL


ELEMENTS OF MANAGERIAL ACCOUNTING J. Costing Principles and Systems A knowledge of all the material in the AS Level syllabus opposite, plus: Process costing, including by-products and waste products and the calculation of work in progress.

Process costing involving normal wastage and joint products, but not involving more than three processes. Stock (Inventory) valuations using absorption and marginal costing principles. Relevant costs and the preparation of costing reports for use in decision-making circumstances. Availability of materials and labour and limiting factors relating to production and capacity.

K. Budgets

Advantages of using budgets. The preparation of the following budgets:

• Master budget – budgeted profit and loss accounts (income statements) and balance sheets

• Production

• Purchases

• Expenditure

• Debtors (Trade receivables)

• Creditors (Trade payables)

• Cash

• Sales. Principal budget factors and the flexing of budgets. Behavioural aspects of budgeting. Limitations of budgets.

L. Standard Costing Establishing cost standards for unit costs, and variance analysis involving usage and price variances.

Types of cost standard. Standard hours and calculation of a standard unit price. Calculation of sales volume and price variances; materials usage and price variances; labour efficiency and rate variances.

• The calculation of overhead and sales mix variances is not required. Questions will not be set on standard costing involving several processes through which a product may pass.


18

AS LEVEL


M. Investment Appraisal This topic is NOT in the AS Level syllabus.


19

A LEVEL


M. Investment Appraisal The elements of investment appraisal including discounted cash flow methods.

Capital investment appraisal to include: Ascertainment of future net cash flows

Payback

Discounted payback

Accounting rate of return (ARR). Discounting methods for calculating the net present value and internal rate of return. Discount factors will be given. Advantages and disadvantages of using different methods of investment appraisal. Treatment of working capital required. Capital rationing and selection of appropriate projects. (Discount factors will be given.)

Other factors affecting investment decisions. Sensitivity analysis.

Critical changes in initial outlay and future net cash flows.


20

SUMMARY OF COMMONLY USED RATIOS (AS and A Level)

1. PROFITABILITY RATIOS

(i) Gross Profit Ratio margin (also known as Gross Profit percentage)

= 100(Revenue) Sales Net

Profit Gross×

Mark up = 100C.O.S.

G.P.×

(ii) Net Profit Ratio (also known as Net Profit percentage) = 100(Revenue) Sales Net

NPBI×

can also be expressed as (Revenue) Sales Net

Profit Net

[Uses NPBI – Net Profit before interest, i.e. add back interest]

(iii) Return on Capital Employed = 100Employed Capital

NPBI×

[Capital Employed = Issued Shares + Reserves + Long Term Liabilities (Non-Current Liabilities)]

(iv) Return on Equity = 100Equity

Dividends Preference after Profit Net×

[Equity = Issued Ordinary Shares + Reserves]

(v) Return on Total Assets = 100Assets Total

NPBI×

[Total Assets = Fixed Assets (Non-Current Assets) + Current Assets]

(vi) 100(Revenue) Sales

Expenses Operating×

Net Sales (Revenue) (vii) Fixed Asset (Non-Current Asset) Turnover =

Total Net Book Value of Fixed Assets (Non-Current Assets)

(after interest)


21

2. LIQUIDITY

(i) Current Ratio = sLiabilitie Current

Assets Current

(ii) Liquid Ratio = sLiabilitie Current

)(Inventory StockAssets Current −

(Also known as ‘Acid Test’ or ‘Quick Ratio’)

(iii) Debtors Turnover = days 365Sales Credit

s)Receivable (Trade Debtors×

(Also known as Average Collection Period)

(iv) Creditors Turnover = days 365Purchases Credit

Payables) (Trade Creditors×

(Also known as Average Payment Period)

(v) Stock Turnover = days 365Sold Goods of Cost

)(Inventory Stock Average×

(Also known as Inventory Turnover)

Or Rate of Stock Turn = )(Inventory Stock Average

Sold Goods of Cost (answer given in times)

A Level ONLY

(vi) Working Capital Cycle (in days) = Debtors Turnover (in days) + Stock Turnover (in days) – Creditors Turnover (in days)

Or Working Capital Cycle (in days) = Average Collection Period + Inventory Turnover (in days)

– Average Payment Period

(vii) 100(Revenue) Sales

Assets Working Net×

(Net Working Assets = Stocks plus Trade Debtors less Trade Creditors = Inventories plus Trade Receivables less Trade Payables)

(viii) Income Gearing = 100Expense Interest

(PBIT) Tax and Interest before Profit×

(ix) Gearing Ratio = Capital Total

Capital Cost Fixed

Which is: Long Term Liabilities (Non-Current Liabilities) + Preference Share Capital

Issued Ordinary Share Capital + All Reserves + Long Term Liabilities (Non-Current Liabilities) + Preference Shares


22

3. INVESTMENT RATIOS (STOCK EXCHANGE RATIOS) A LEVEL ONLY

(i) Earnings per share = Shares Ordinary issued of No.

Dividend Share PreferenceProfit Net −

(ii) Price Earnings Ratio = share per Earnings

share per Price Market

(iii) Dividend yield = share of Price Market

proposed and paid Dividend

(iv) Dividend cover = paid dividend Ordinary

dividend ordinary pay to available Profit

(v) Dividend per share = sales ordinary issued of Number

paid dividend Ordinary

4. CASH FLOW RATIOS

(i) 100(Revenue) Sales

Flow Cash Operating×

(ii) 100sLiabilitie Current


(iii) 100Expense Interest


(iv) 100Dividend rsShareholde Ordinary

Dividend Preference and Taxation Interest, lessFlow Cash Operating×

• Ratios should be calculated using year-end balances where appropriate, unless the question specifies the use of average figures.

• Ratios should be calculated to the number of decimal places required by the question.


23

RESOURCE LIST This is NOT a list of prescribed texts, but merely an attempt to provide a range of alternatives from which teachers may like to choose.

Student Textbooks

Author Title Publisher ISBN Date

Harold Randall Accounting: A Level and AS Level *Endorsed Textbook*

CUP 0521539935 2004

David Cox Business Accounts Osborne 1872962580 1999

Ian Harrison Introducing Accounting for AS Hodder and Stoughton

0340873051 2004

Ian Harrison Advanced Accounting for A2 Hodder and Stoughton

0340873124 2004

Ian Harrison The Complete A-Z Accounting Handbook

Hodder and Stoughton

0340691247 2003

Ian Harrison A Level Study Guide: Accounting

Letts 1857583906 1996

Riad Izhar and Janet Hontoir

Accounting, Costing and Management

Oxford UP 0198328230 2001

Harold Randall A Level Accounting (3rd edn) Letts Educational 1858051622 1996

Frank Wood A Level Accounting FT Prentice Hall 0273631616 1998

Teacher’s Resources

Catherine Coucom Professional Development for Teachers: Teaching and Assessing Skills in Accounting

CUP 0521543673 2005

Ian Harrison The Complete A-Z Accounting Hodder and Stoughton

0340 872667 2005

Frank Wood and Alan Sangster

Business Accounting 1 (10

th Edition)

Prentice Hall 0273681494 2005

Frank Wood and Alan Sangster

Business Accounting 2 (10

th Edition)

Prentice Hall 0273693107 2005


24

Online Resources:

1 http://www.osbornebooks.co.uk/pdf/resources_accounting.pdf If problems are experienced

with this site, select http://www.osbornebooks.co.uk/resources.html then select Student Resources, Select Accounting and Finance and the Select Accounting Documents.pdf)

2 http://www.nrbarton.co.uk/Bookkeeping/index.html 3 http://accounting10.tripod.com/content.htm 4 http://www.askltd.com/askjava/Intro.htm 5 http://www.staffs.ac.uk/schools/business/bsadmin/staff/s5/mscproj/defn.htm 6 http://www.bized.ac.uk/compfact/ratios/ 7 http://www.bized.ac.uk/stafsup/options/accounting/index.htm 8 http://www.accountingeducation.com/links/index.cfm (useful to focus searching to relevant

areas) 9 http://www.carolworld.com/ (Company Annual Reports Online site; commercial final accounts) 10 http://www.bbc.co.uk/schools/gcsebitesize/business/finance/index.shtml (covers aspects of the

syllabus) 11 http://www.business-studies.co.uk/accounts.htm (Business Studies but some relevant

resources for Accounting) 12 http://www.tutor2u.net/revision_notes_accounting.asp (Business Studies but relevant

resources for Accounting) 13 http://www.learncie.org.uk/Login.aspx?ReturnUrl=%2fDefault.aspx (Business Studies but

some relevant resources for Accounting) 14 http://www.accaglobal.com/publications/studentaccountant/technician/ (ACCA Student

Accountant site with some relevant articles) International Standards: 15 http://www.iasplus.com/index.htm (Click on the standards button in the heading and then scroll

down) 16 http://www.answers.com (Then insert the relevant IAS in the heading) 17 http://en.wikipedia.org/wiki/Main_Page (Use the search facility to find individual IAS e.g. IAS 1:

Presentation of Financial Statements. Wikipedia is also available in other languages – scroll down to the languages section on the Main Page.)


25

INTERNATIONAL STANDARDS TERMINOLOGY The following list has been collated to help Centres prepare for the introduction of international standards to CIE accounting syllabuses. It is anticipated that standards which are well known, and are relevant to the level of study, will be brought into question papers, mark schemes and associated documents. Centres are encouraged to apply the new terminology to their teaching and learning materials so that candidates sitting for examination will be aware of the terms. Candidates will not be penalised for using different terms.

International usage Current CIE/UK usage

Balance sheet Balance sheet

Bank (and other) loans/ Interest bearing loans and borrowing

Loans repayable after 12 months

Bank overdrafts and loans/ Interest bearing loans and borrowing

Loans repayable within 12 months

Capital or Equity/Shareholders’ Equity Capital

Cash (and cash equivalents) Bank and cash

Cost of sales Cost of goods sold

Current assets Current assets

Current liabilities Current liabilities/ Creditors: amounts due within 12 months

Finance costs Interest payable

Finance Income/Investment revenues Interest receivable

Financial Statements Final accounts

Gross profit Gross profit

Income statement Trading and profit and loss account

Intangible assets Goodwill etc.

Inventory/Inventories (of raw materials and finished goods)

Stock

Investment property Investments

Non-current assets Fixed assets

Non-current liabilities Long term liabilities/ Creditors: amounts falling due after more than one year

Other operating expenses Sundry expenses (administration and distribution)

Other operating income Sundry income

Other payables Accruals

Other receivables Prepayments

Plant and equipment Plant and equipment

Profit (before tax) for the year Net Profit

Property Land and buildings

Raw materials Ordinary goods purchased

Purchases

Revenue Sales

Share capital Share capital

Trade payables Creditors

Trade receivables Debtors

Work in progress Work in progress


26

INTERNATIONAL ACCOUNTING STANDARDS

Company Financing

A basic knowledge of the principles underlying –

IAS Topic FRS/SSAP equivalent

IAS 1 Presentation of Financial Statements FRS3

IAS 2 Inventories (stocks) SSAP9

IAS 7 Cash flow statements FRS1

IAS 8 Accounting Policies FRS18

IAS 10 Events after balance sheet date SSAP17

IAS 16 Property, plant and equipment FRS15

IAS 18 Revenue No direct equivalent

IAS 23 Borrowing costs No direct equivalent

IAS 32 Financial Instruments: presentation and disclosure FRS 4

IAS 33 Earnings per share FRS14

IAS 35 Discontinuing operations FRS3

IAS 36 Impairment of assets FRS11

IAS 37 Provisions, contingent liabilities and contingent assets FRS12

IAS 38 Intangible assets FRS10

IAS 39 Financial Instruments: recognition and measurement FRS13